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HCI Group (HCI) Q4 Earnings and Revenues Miss Estimates

Zacks Equity Research

HCI Group, Inc. HCI reported fourth-quarter 2018 operating loss per share of 48 cents, wider than the Zacks Consensus Estimate of a loss of 40 cents. Also, the bottom line declined from the year-ago earnings of $1.14 per share.  

The quarter suffered due to cat loss stemming from Hurricane Michael.

Behind the Headlines

Gross premiums written increased 6% year over year to $43.6 million.

Operating revenues of $53 million declined 14.5% year over year and missed the Zacks Consensus Estimate by 12.1%. Lower net premiums earned, policy fee income and other resulted in the downside.

Net investment income surged 68.3% year over year to $4.9 million.

Total expense of $64.3 million increased 44% year over year driven by higher losses and loss adjustment expenses, general and administrative personnel expenses and interest expense.

The loss ratio deteriorated 2300 basis points (bps) year over year to 49.4% largely due to Hurricane Michael. Combined ratio deteriorated 4190 bps year over year to 122%.

HCI Group, Inc. Price, Consensus and EPS Surprise

HCI Group, Inc. Price, Consensus and EPS Surprise | HCI Group, Inc. Quote

Full-Year Highlights

Operating loss per share was $3.23, deteriorating from the year-ago loss of 75 cents.  

Operating revenues of $235.4 million declined 2.5% from 2017.

Combined ratio of 95.8% improved 2000 bps driven by lower loss ratio.

Financial Update

HCI Group exited 2018 with total investments of $387.8 million, up nearly 2% year over year. Cash and cash equivalents totaled $34.9 million, down 6.4% from 2017 end.

Long-term debt of $250.2 million increased 5.2% year over year.

HCI Group exited 2018 with total shareholders’ equity of $181.4 billion, down 1.4% year over year.

As of Dec 31, 2018, book value per share was $21.71, down 1.9% year over year

Dividend Update

The board of directors increased quarterly cash dividend by 6.7% to 40 cents per share per quarter, representing the ninth dividend increase.

Zacks Rank

HCI Group currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other P&C Insurers

Among other players from the insurance industry, which have already reported fourth-quarter earnings, The Travelers Companies, Inc. TRV and RLI Corp. RLI outpaced the respective Zacks Consensus Estimate, while The Progressive Corporation’s PGR earnings missed the same.

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